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Negative Duration

    0.02 sec.
Negative duration
Occurs when the price of an MBS moves in the same direction as interest rates.

Negative Duration
1. A situation in which the price of a bond or other debt security moves in the same direction of interest rates. That is, negative duration occurs when the bond prices go up along with interest rates and vice versa.

2. In banking, a situation in which the duration of a bank's liabilities exceeds that of its assets. Negative duration means that the bank's equity is negative.


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